Certain Underwriters at Lloyd's, London et al v. Garmin International Inc. et al

Filing 180

MEMORANDUM AND ORDER finding as moot 26 Motion for Summary Judgment; denying 67 Motion for Summary Judgment; granting 71 Motion for Summary Judgment. Signed by District Judge Eric F. Melgren on 7/15/2013. (aa)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

CERTAIN UNDERWRITERS AT
LLOYD’S LONDON, et al.
Plaintiffs,

vs.

Case No. 11-cv-2426-EFM

GARMIN INTERNATIONAL INC., et al.,
Defendants.

MEMORANDUM AND ORDER
This is a declaratory judgment action by certain foreign and domestic insurers
(“Plaintiffs”) seeking a declaration that they do not have a duty to defend or indemnify
Defendant Henry Bartle for claims asserted in a lawsuit pending in California state court arising
out of the crash of Defendant Bartle’s airplane. Bartle claims that he is entitled to coverage
under an Aviation Products and Grounding Liability Insurance Policy (the “Policy”) issued to
Garmin International, Inc., because he formed some type of business entity with Garmin when
his friend, a Garmin AT, Inc., employee, helped him build the aircraft at Bartle’s hangar in
Oregon. Before the Court is Plaintiffs’ Motion for Summary Judgment (Doc. 26), Plaintiffs’
Second Motion for Summary Judgment (Doc. 71), and Bartle’s Motion for Summary Judgment
(Doc. 67). For the reasons set forth below, the Court finds that Defendant Bartle is not entitled

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to coverage under the Policy.

The Court grants Plaintiffs’ Second Motion for Summary

Judgment (Doc. 71) and denies the remaining motions before the Court.
I.
A.

Factual and Procedural Background

The Insurance Policy Issued to Garmin
Plaintiffs issued an Aviation Products and Grounding Liability Insurance Policy

AB0700442 (the “Policy”) to Garmin International, Inc. (“Garmin”) that was in effect from
November 30, 2007, to November 30, 2008.
The Schedule page of the Policy lists the “Insured” as follows:
GARMIN INTERNATIONAL, INC., GARMIN USA, INC., GARMIN LTD,
GARMIN CORPORATION, GARMIN EUROPE LIMITED, PRONAV
CORPORATION, PRONAV INTERNATIONAL, INC., GARMIN AT, INC.,
GARMIN B.V., GARMIN N.V., MOTIONBASED and any subsidiary
corporation or subsidiary thereof now existing or hereinafter created. Subsidiary
corporation shall mean any entity that is under the ownership or management
control of Garmin International, Inc., Garmin Corporation, Garmin Europe
Limited, Pronav Corporation and Pronav International, Inc. and/or subsidiary
companies and/or affiliated companies and/or associated companies for their
respective rights and interests.1
The term “Insured” is further defined in the Policy at Definition (G) and amended per the
“ADDITIONAL CONDITIONS,” to read:
The word “Insured” shall mean the Insureds named above and all subsidiaries,
affiliated, associated, or allied companies, corporation, foundations, firms, joint
ventures, partnerships, or any entities entered into, acquired, or formed, now
existing, which may have existed, or hereafter be constituted after the effective
date of this policy by any such Insured and over which such Insured has any
ownership interest, or exerts financial control, or has assumed or exercised
management control, or for which the Insured has obligation to provide
insurance.2
The Schedule contains the following provision regarding the address of the “Insured”:
1

Policy, Doc. 27-1, p. 2.

2

Policy, Doc. 27-1, p. 8.

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1200 East [sic] 151st Street Olathe, Kansas 66062, United States of America.
The Insured is: Corporation3
And, the Information page in the Policy states the following:
The Insured owns a corporate hangar located at New Century Airport in Overland
Park, Kansas, which is used mainly to hangar Garmin Owned aircraft. This
facility is occasionally used for temporary (overnight) storage of customers
aircraft who visit their facility. . . .4
The Aircraft Builders Products Liability Insurance Wording section of the Policy
provides, through “Coverage A- PERSONAL INJURY AND PROPERTY DAMAGE
LIABILITY,” that Plaintiffs agree:
To pay on behalf of the Insured all sums which the Insured shall become legally
obligated to pay as damages because of personal injury, sickness or disease,
including death at any time resulting therefrom sustained by any person (herein
referred to as “Personal Injury”) and because of injury to or destruction of
property including the loss of use thereof (herein referred to as “Property
Damage”), caused by an Occurrence arising out of the Products Hazard.5
That section also provides, through “DEFENCE- OTHER PAYMENTS,” that Plaintiffs agree:
To defend any claim or suit against the insured alleging such Personal Injury,
Property Damage, or Grounding of completed aircraft occurring after delivery to
and acceptance by a purchaser or operator of such aircraft for flight operations,
and seeking damages on account thereof, even if such claim or suit is groundless,
false or fraudulent . . . .6
The term “Products Hazard” is defined to mean the “handling or use of (other than by the
Insured) or the existence of any condition in an Aircraft Product (1) when such Aircraft Product
is not in the possession of the Insured and (2) when such Aircraft Product is away from premises

3

Policy, Doc. 27-1, p. 2.

4

Policy, Doc. 27-1, p. 10.

5

Policy, Doc. 27-1, p. 14.

6

Id.

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owned, rented, or controlled by the Insured.”7 The term “Occurrence” is defined to mean “an
accident . . . which arises out of the Products Hazard and causes, during the Insurance Period,
Personal Injury or Property Damage which is neither expected nor intended from the standpoint
of the Insured.”8
The Policy also provides an Excess Liability Extension that provides coverage for “all
sums which the Insured shall become legally obligated to pay as damages because of Bodily
Injury and/or Property Damage caused by an Occurrence during the period of insurance arising
out of the Insured’s operations covered by and as more fully set forth in the underlying
insurance.”9 The “underlying insurance” is identified on the Information page of the Policy as an
“Aircraft Owned/Non Owned Liability” policy and a “Hangarkeepers and Premises Liability”
policy issued by an insurer identified as “GAUM.”10 For coverage under the Excess Liability
Extension to attach, the Policy requires:
(d) Attachment of Liability
Liability to pay under this Extension shall not attach unless and until the
underlying insurers shall have admitted liability for the underlying limit or unless
and until the Insured has by final judgment been adjudged to pay an amount
which exceeds such underlying limit and then only after the underlying insurers
have paid or have been held liable to pay the full amount of the underlying limit.11

7

Policy, Doc. 27-1, p. 15.

8

Policy, Doc. 27-1, p. 16.

9

Policy, Doc. 27-1, p. 4.

10

Policy, Doc. 27-1, p. 10.

11

Policy, Doc. 27-1, p. 5.

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B.

Defendant Bartle’s Lancair IV Aircraft and Relationship with Garmin
In fall 2006, Garmin was looking to install one of its avionics products, designated the

G900X, in home-built, experimental aircraft, including the Lancair IV aircraft. At the same
time, Defendant Bartle was building his own Lancair IV at his hangar in Oregon. According to
Bartle, he built ninety-five percent of the aircraft himself while the other five percent was built
by multiple people, including Bartle’s neighbor and best friend Chris Schulte, who designed and
installed the electrical system in the airplane.
Schulte was a Garmin AT employee. In late 2006, Schulte approached Bartle about
installing the G900X into his aircraft in exchange for Bartle giving him and other Garmin
employees access to his aircraft to obtain installation and substantiation data. Bartle agreed, and
in late 2006 or early 2007, Schulte purchased the G900X for Bartle from Garmin using his
employee discount. Per Garmin policy, Schulte paid for the G900X with a personal check, and
then resold the system at the same price to Bartle.
Schulte performed the majority of his work on Bartle’s aircraft on the weekends at
Bartle’s hangar in Oregon. He did not work on the aircraft at Garmin, and he did not view
working on the aircraft as a Garmin activity. Rather, he believed he was doing the work as a
friend. Schulte had limited help with the installation and set-up of the G900X system from other
Garmin employees. One Garmin employee installed part of the wiring in Bartle’s aircraft at
Bartle’s hangar, per Schulte’s request. Another Garmin employee went to Bartle’s hangar to
obtain data from the aircraft, which was used to create technical drawings and portions of the
G900X installation manual.
The G900X uses an aircraft-specific bracket to hold one component of the system in
place. Because of his background in composite fabrication, Bartle designed this bracket for the

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installation of the G900X system in his aircraft. Garmin used the design of Bartle’s bracket in
the G900X installation manual and listed Bartle’s company, the “Ultimate Group,” as the
supplier for that bracket in the manual. The Ultimate Group has sold approximately ten brackets
for use with the system.
During the installation of the G900X system, Bartle was never employed by Garmin,
was never paid a salary, and never received any financing from Garmin. When asked whether
Garmin had any commercial interest in installing the G900X in his aircraft, he said that the
installation was “more of a favor to allow them to use the airplane to make brackets so that they
could make their installation manual and everything to put the 900 into the Lancair aircraft.”12
Bartle never attended any development or weekly planning meetings at Garmin during the
installation and did not receive notes from those meetings. Bartle had no written contract with
Garmin, did not sign any releases, and Garmin never provided Bartle with any written instruction
or parameters for any work on the aircraft.
Bartle received a Certificate of Registration for the aircraft in November 2007 and a
Special Airworthiness Certificate for the aircraft in January 2008.

The registration lists

“Trustees” Henry and Donna Bartle as the registered owners of the aircraft.
C.

The California Lawsuit and Bartle’s Tender of Defense and Indemnification
On February 26, 2008, Bartle was operating his aircraft in Riverside County, California,

on a personal, sight-seeing flight. On board the aircraft were Bartle’s step-daughter, her friend,
and her friend’s minor daughter. All were injured when the aircraft engine lost power during
flight and crash landed short of the runway. The passengers and their respective spouses filed

12

Bartle Dep., Doc. 72-3, pp. 10-11.

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individual suits against Bartle and others, including forty “Doe” defendants, in Los Angeles
County Superior Court seeking damages for their injuries. Bartle subsequently brought suit
against Performance Engines and Light Speed Engineering for claims of product liability,
negligence, and breach of warranty. Bartle also added Garmin and Garmin AT as defendants
alleging joint venture and claiming total equitable indemnity, comparative indemnity, equitable
apportionment of fault, and contribution. All of these suits have been consolidated into a single
lawsuit currently pending in California state court (the “underlying lawsuit”).
The passengers on board Bartle’s aircraft have asserted four claims in the underlying
lawsuit: strict product liability, negligence, breach of express and implied warranties, and loss of
consortium. The only two claims asserted against Bartle are negligence and loss of consortium.
These claims are asserted against Bartle in his individual capacity. The negligence cause of
action alleges that Bartle “breached his duty to [defendants] by negligently operating the airplane
such that the airplane crashed to the ground, thereby injuring them.”13 The California complaint
also alleges that the defendants were negligent in the building and fabrication of the aircraft and
that Bartle and Garmin (one of the “Doe” defendants) were acting as “agents, servants,
employees and/or joint venturers” of one another and were “acting within the course, scope, and
authority of said agency, employment and/or venture.”14
By letter dated June 29, 2011, Bartle’s counsel tendered the defense and indemnification
of the negligence claims against him in the underlying lawsuit to Plaintiffs under the Policy
asserting that the aircraft “was built in a joint venture with Garmin” and that the Policy “includes

13

California State Court Complaint, Doc. 68-6, p. 9 (attached as Exhibit F to Defendant Bartle’s
Memorandum in Support of Summary Judgment).
14

California State Court Complaint, Doc. 68-6, p. 6.

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coverage for all Garmin joint ventures.”15 Plaintiffs denied coverage by letter dated July 26,
2011, citing among other things, lack of any evidence that Bartle was in a joint venture with
Garmin under Kansas law.
Plaintiffs initiated this declaratory judgment action on August 2, 2011, asking the Court
to find, in part, that they have no duty to defend and indemnify Bartle for any of the claims or
allegations against him in the underlying lawsuit. The Parties have now moved for summary
judgment on Plaintiffs’ claims. Plaintiffs have filed two motions for summary judgment (Docs.
26 and 71), and Defendant Bartle has also filed a motion for summary judgment (Doc. 67).
II.

Legal Standard

Summary judgment is appropriate if the moving party demonstrates that there is no
genuine issue as to any material fact, and the movant is entitled to judgment as a matter of law.16
A fact is “material” when it is essential to the claim, and issues of fact are “genuine” if the
proffered evidence permits a reasonable jury to decide the issue in either party’s favor.17 The
movant bears the initial burden of proof, and must show the lack of evidence on an essential
element of the claim.18 If the movant carries this initial burden, the nonmovant that bears the
burden of persuasion at trial may not simply rest upon its pleadings; the burden shifts to the
nonmovant to go beyond the pleadings and “set forth specific facts” that would be admissible in
evidence in the event of trial from which a rational trier of fact could find for the nonmovant.19
15

Letter, Doc. 68-6, p. 2.

16

Fed. R. Civ. P. 56(c).

17

Haynes v. Level 3 Commc’ns, LLC, 456 F.3d 1215, 1219 (10th Cir. 2006).

18

Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 851 (10th Cir. 2003) (citing Celotex Corp. v. Catrett,
477 U.S. 317, 322–23 (1986)).
19

Id. (citing Fed. R. Civ. P. 56(e)).

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These facts must be clearly identified through affidavits, deposition transcripts, or incorporated
exhibits.20 Finally, summary judgment is not a “disfavored procedural shortcut,” but it is an
important procedure “designed to secure the just, speedy and inexpensive determination of every
action.”21
III.
A.

Analysis

Plaintiffs’ Motions for Summary Judgment
As previously noted, Plaintiffs have filed two motions for summary judgment. In their

first motion, Plaintiffs ask the Court to grant summary judgment on the basis that assuming that
Bartle is an “Insured” under the Policy, then he is not entitled to coverage based on the
requirements of the Policy and its exclusions. In their second motion, Plaintiffs ask the Court to
grant summary judgment on the basis that Bartle is not an “Insured” under the Policy. The Court
will address Plaintiffs’ second motion first.
1.

Plaintiffs’ Second Motion for Summary Judgment (Doc. 71)

Plaintiffs assert two arguments in support of their second motion for summary judgment.
First, they argue that Bartle is precluded from coverage based on the allegations in the
underlying lawsuit. Second, they argue that Bartle is not entitled to coverage because he is not
entitled to “Insured” status under the Policy because there is no evidence of a joint venture or
other business entity between him and Garmin. As explained below, the Court agrees with both
of Plaintiffs’ arguments and grants summary judgment in their favor.
a.

Defendant Bartle Is Precluded from Coverage Based on the
Allegations in the Underlying Lawsuit.

20

Mitchell v. City of Moore, Okla., 218 F.3d 1190, 1197 (10th Cir. 2000) (citing Adler v. Wal-Mart
Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998)).
21

Celotex, 477 U.S. at 327 (quoting Fed. R. Civ. P. 1).

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Plaintiffs contend that Bartle is precluded from coverage because he asserts that he was a
“consumer” at the time of the accident and the Policy only provides coverage for “Insured[s],”
not consumers of a Garmin product. According to Plaintiffs, the only claims asserted against
Bartle in the underlying lawsuit are those asserted against him individually arising from his
negligent operation of the aircraft. Plaintiffs argue that because the definition of “Insured” does
not encompass Bartle individually, there is no basis to find that Bartle is entitled to coverage
under the Policy.
The Court agrees. Regardless of his role as “consumer” at the time of the accident, Bartle
is precluded from coverage because he is not entitled to status as an “Insured” under the Policy
in his individual capacity and the underlying lawsuit only asserts claims against Defendant Bartle
in that capacity. To explain more fully, the term “Insured” is defined in the Aircraft Builders
Products Liability Insurance Wording section of the Policy as Garmin and its subsidiaries as well
as:
all subsidiaries, affiliated associated or allied companies, corporation,
foundations, firms, joint ventures, partnerships, or entities, entered into, acquired,
or formed, now existing, which may have existed, or hereafter be constituted after
the effective date of this policy by any such Insured and over which such Insured
has an ownership interest, or exerts financial control, or has assumed or exercised
management control, or for which the Insured has an obligation to provide
insurance.22
Based on this definition, Bartle cannot be an “Insured” in his individual capacity. The only
person who can be an “Insured” under the Policy is the alleged joint venture or other entity listed
in the definition of “Insured” above between Garmin and Bartle (the “Garmin/Bartle entity”).
Furthermore, the Policy’s indemnification provision states that Plaintiffs will pay “on behalf of
22

Policy, Doc. 27-1, p. 8.

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the Insured all sums which the Insured shall become legally obligated to pay as damages . . . .”
Here, the underlying lawsuit lists Bartle in his individual capacity as a defendant. It does not list
the alleged Garmin/Bartle entity as a defendant. Therefore, even if the alleged Garmin/Bartle
entity did exist, it cannot be found “legally obligated” to pay damages, and there is no coverage
under the Policy for the claims asserted in the underlying lawsuit.
Defendant Bartle argues that he is not precluded from coverage because the Complaint in
the underlying lawsuit alleges that Bartle and Garmin “were the agents, servants, employees,
and/or joint venturers” of one another and were each “acting within the course, scope and
authority of said agency, employment and/or venture,” and that defendants were negligent in the
building of the aircraft.

These allegations, however, do not legally obligate the alleged

Bartle/Garmin entity to pay any damages in the underlying lawsuit.

Rather, they impose

individual liability on each defendant for their actions taken while acting as part of the alleged
Bartle/Garmin entity.
Bartle also argues that the allegations in the underlying lawsuit at least require Plaintiffs
to defend him in the underlying lawsuit. In support of this argument, Bartle relies on the Kansas
Supreme Court’s decision in Miller v. Westport Insurance Corp.,23 which states that “insurers
have a duty to defend if there is a potential for liability.”24 However, when the issue is whether
the party seeking coverage is an insured, the Kansas courts have applied “the ultimate showing
test,” which states that the duty to defend does not arise until it is shown that the person seeking

23

288 Kan. 27, 200 P.3d 419 (2009).

24

288 Kan. at 35, 200 P.3d at 424.

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coverage is, in fact, an insured.25 In Williams v. Community Drive-In Theater, Inc.,26 the Kansas
Court of Appeals explained why the ultimate outcome was controlling when determining
whether a party was entitled to defense under the policy:
Before the general principle regarding the duty to defend applies, it must be
shown that under the policy the defendant is in fact an insured, named or
omnibus. This must be so because the insurer's obligation is not to provide a
defense for a stranger merely because the plaintiff alleges that the defendant is an
insured or alleges facts which, if true, would make him an insured. While an
insurer may not decline the defense of an insured against an ultimately groundless
claim, neither may it be compelled to defend an action against a party not entitled
thereto under the policy provisions.27
According to the Williams court, “the plaintiff may not create an obligation on the part of the
insurer where no obligation previously existed.”28 Here, the Court has already found that there is
no coverage under the Policy for either Defendant Bartle individually or the Garmin/Bartle
entity. Therefore, under the ultimate showing test, Plaintiffs have no duty to defend Bartle in the
underlying lawsuit.
b.

Defendant Bartle Has Not Met His Burden to Show That a Joint Venture
or Any Other Type of Entity Existed between Him and Garmin.

Plaintiffs also contend that summary judgment is appropriate because the evidence shows
that there was no joint venture between Garmin and Bartle to entitle Bartle to “Insured” status
under the Policy. Although Plaintiffs limit their motion to whether Bartle and Garmin were
engaged in a joint venture, at oral argument before the Court, Plaintiffs’ counsel stated that any

25

Martin K. Eby Const. Co. v. One Beacon Ins. Co., 2013 WL 676569, at *8 (D. Kan. Feb. 25, 2013); see
also S. Cent. Kan. Health Ins. Group v. Harden & Co. Ins. Servs., Inc., 278 Kan. 347, 353, 97 P.3d 1031, 1035
(2004) (“When there is no coverage under the insurance policy, there is no duty to defend.”).
26

3 Kan. App. 2d 352, 595 P.2d 724 (1979).

27

3 Kan. App. 2d at 354, 595 P.2d at 726.

28

Id.

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of the entities listed in amended definition of “Insured” under the Policy would be entitled to
coverage. Plaintiffs have also stated that there is no evidence of any such entity between Bartle
and Garmin in this case.
In response, Bartle claims that he has submitted sufficient evidence of either a joint
venture or other business entity between him and Garmin to defeat Plaintiffs’ motion for
summary judgment. Bartle claims that the evidence shows that Garmin, through its employee
Chris Schulte, entered into an express agreement under which Garmin agreed to sell to Bartle
and install in his aircraft, a G900X system, including the design and installation of the aircraft’s
electrical system, for a $20,000 discount. In exchange, Bartle permitted and assisted Garmin in
developing the bracketry, mounts, locations, and installation manuals Garmin needed to market
the G900X for the Lancair aircraft.
The Court finds that Bartle has not met his burden to overcome Plaintiffs’ motion for
summary judgment. Because Bartle is seeking coverage under the Policy, he has the burden to
show that he is entitled to coverage in the first instance.29 Therefore, Bartle must “set forth
specific facts” that would be admissible in evidence at trial from which a rational trier of fact
could find that a joint venture or other business entity existed between him and Garmin.30 Bartle
has failed to do this. Practically all of the facts that Bartle relies on to support the existence of a
joint venture or other business entity fail to conform to D. Kan. Rule 56.1. That rule states:
1) A memorandum in opposition to a motion for summary judgment must begin
with a section containing a concise statement of material facts as to which the
party contends a genuine issue exists. Each fact in dispute must be numbered by
paragraph, refer with particularity to those portions of the record upon which the
29

Kansas Farm Bureau Ins. Co. v. Reynolds, 16 Kan. App. 2d 326, 328, 823 P.2d 216, 218 (1991).

30

Celotex, 477 U.S. at 325 (citing Fed. R. Civ. P. 56(e)).

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opposing party relies, and, if applicable, state the number of movant's fact that is
disputed.
(2) If the party opposing summary judgment relies on any facts not contained in
movant's memorandum, that party must set forth each additional fact in a
separately numbered paragraph, supported by references to the record, in the
manner required by subsection (a), above. All material facts set forth in this
statement of the non-moving party will be deemed admitted for the purpose of
summary judgment unless specifically controverted by the reply of the moving
party.31
Bartle attached over 700 pages of exhibits to his response to Plaintiffs’ motion but fails to cite to
specific page numbers or facts within these exhibits in support of his Additional Statement of
Uncontroverted Facts. More specifically, when describing the alleged Garmin/Bartle entity, he
cites to over 400 pages of exhibits without any reference to any page number or fact within those
exhibits. The Court will not sift through the record in an attempt to find a genuine issue of
material fact or locate arguments for Bartle.32 It is his responsibility to tie the facts to his legal
contention.33 “Without a specific reference, ‘[the Court] will not search the record in an effort to
determine whether there exists dormant evidence which might require submission of the case to a
jury.’ ”34 The Court therefore disregards those facts that Bartle has not supported with specific
citation to the record.
Moreover, those facts that Defendant Bartle specifically referenced in the record do not
allow a rational trier of fact to find that there was a joint venture or other Garmin/Bartle entity.
There is no evidence that Garmin intended to or actually entered into a joint venture or formed

31

D. Kan. Rule 56.1(a).

32

KM Mentor, LLC v. Knowledge Mgmt. Prf’l Soc’y, Inc., 712 F. Supp. 2d 1222, 1230 (D. Kan. 2010)
(citing Boldridge v. Tyson Foods, Inc., 2007 WL 1299197, at *2 (D. Kan. May 2, 2007)).
33

Id.

34

Id. (quoting Gross v. Burggraf Const. Co., 53 F.3d 1531, 1546 (10th Cir. 1995)).

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any other business entity with Bartle. Indeed, Garmin denies the existence of any association
between the parties, and there are no express agreements evidencing the existence of such
association. Because of a lack of express agreement between the parties, the only way that such
joint venture or other entity could exist is if Bartle’s friend, Chris Schulte, had the apparent
authority to bind Garmin to a joint venture or other business entity with Bartle.
“Apparent authority exists where a principal, either intentionally or negligently, creates
an appearance that its agent possesses authority to act or contract in the name of the principal,
and a third party reasonably relies on that appearance of authority.”35 “The apparent authority of
an agent to bind the principal rests upon words or conduct of the principal which leads the third
party dealing with the agent to reasonably believe the agent’s authority is sufficient to cover the
transaction in question.”36 In some instances, “the words or conduct of the principal are overt or
explicit.”37 In other instances, “the mere relationship between the agent and principal or the title
conferred upon the agent by the principal is sufficient to constitute a representation of
authority.”38 Examples of these types of cases are the so-called “powers of position” cases,
which include: general manager, president, and partner.39
Here, Bartle has produced no evidence showing that Chris Schulte had the apparent
authority to bind Garmin. At the time Schulte approached Bartle about installing the G900X
35

FDIC v. Medmark, Inc., 902 F. Supp. 1430, 1434 (D. Kan. 1995)

36

Bucher & Willis Consulting Eng’rs, Planners, and Architects v. Smith, 7 Kan. App. 2d 467, 470, 643
P.2d 1156, 1159 (1982).
37

Id.

38

Id.

39

Id. (citing Hull v. Mfg. Co., 92 Kan. 538, 141 Pac. 592 (1914); W. Adver. Co. v. Crawford, 128 Kan.
145, 276 Pac. 813 (1929); Solomon R.R. Co. v. Jones, 30 Kan. 601, 2 Pac. 657 (1883); Belluomo v. KAKE TV &
Radio, Inc., 3 Kan. App. 2d 461, 596 P.2d 832 (1979)).

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system into Bartle’s aircraft, Schulte was a supervisor of an aircraft engineering group that
developed installation data for Garmin equipment. This is not a position of power sufficient to
constitute a representation of authority. Furthermore, there is no other written evidence or oral
testimony showing overt or explicit conduct on Garmin’s behalf granting Schulte such apparent
authority. Therefore, because Schulte did not have the power to bind Garmin, there was no
Bartle/Garmin entity.
Besides failing to show that Schulte had the authority to bind Garmin to a joint venture or
other business entity, Bartle has also failed to come forward with specific facts showing that such
joint venture or business entity ever existed. There is no evidence that Bartle ever expected to
receive any profit from his arrangement from Garmin.40

Although Bartle’s company, The

Ultimate Group, was listed in the G900X installation manual as the supplier of the bracketry
needed for the system and has since sold ten brackets, this is a benefit received by The Ultimate
Group and not Bartle himself. The evidence also shows that Bartle was never employed by
Garmin, never received a salary from Garmin, and never received any financing from Garmin.
Bartle also never participated in any Garmin development meetings for the G900X system.
Accordingly, the Court finds that the Defendant Bartle has failed to meet his burden to come
forward with specific facts showing that he is entitled to “Insured” status under the Policy.
c.

The Court Will Not Stay or Decline to Decide the Joint Venture/ Business
Association Issue in Favor of the California State Court’s Decision.

40

Both the definition of joint venture and partnership—two entities listed in the amended definition of
“Insured” under the Policy—require that the entity carry out a business or enterprise for profit. A joint venture is
defined as an “association of two or more persons or corporations to carry out a single enterprise for profit.”
Paradigm Alliance Inc. v. Celeritas Techs., LLC, 659 F. Supp. 2d 1167, 1178 (D. Kan. 2009). The Kansas Uniform
Partnership Act defines a “partnership” as “an association of two or more persons to carry on as co-owners a
business for profit . . . .” K.S.A. § 56a-101.

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In an attempt to overcome Plaintiffs’ motion, Bartle argues that the Court should stay the
action or decline to decide the Garmin/Bartle entity issue in favor of the underlying California
lawsuit. Bartle, however, previously raised this issue with the Court in a motion to dismiss (Doc.
9), which the Court denied (Doc. 33). The time to seek reconsideration of the Court’s decision
has passed.41 Moreover, Bartle has not put forth any persuasive facts or argument that would
cause the Court to reverse its previous decision to hear this declaratory judgment action.
Accordingly, the Court will not decline to stay or decide this action in favor of the California
state court’s ruling on whether Bartle and Garmin were engaged in a joint venture.
d.

The Excess Liability Policies Are Irrelevant.

Finally, Bartle also argues that the Court should deny Plaintiffs’ second motion for
summary judgment because of the existence of two underlying policies, titled “Aircraft
Owned/Non Owned Liability” and “Hangarkeepers and Premises Liablity” (the “Underlying
Policies”), that provide coverage under the Excess Liability Extension in the Policy. According
to Bartle, the Underlying Policies support his claim for defense and indemnity because they
highlight “a tremendous expansion of persons and Garmin-related entities insured by Plaintiffs,
which will assist the Court in its determination whether or not the business association between
Bartle and Garmin falls within Plaintiffs’ vague and ambiguous description of ‘who is
Insured.’ ”42 In response, Plaintiffs argue that Underlying Policies are irrelevant because they do
not provide primary coverage to Bartle.

41

See D. Kan. R. 7.3 (“Parties seeking reconsideration of non-dispositive orders must file a motion
within 14 days after the order is filed unless the Court extends the time.”).
42

Defendant’s Sur-Reply Memorandum in Opposition to Plaintiffs’ Motions for Summary Judgment,
Doc. 167, p. 4.

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The Court agrees with Plaintiffs. The Excess Liability Extension does not attach (1)
“unless and until the underlying Insurers shall have admitted liability for the underlying limit” or
(2) “unless and until the Insured has by final judgment been adjudged to pay an amount which
exceeds such underlying limit and then only after the underlying Insurers have paid or been held
liable to pay the full amount of the underlying limit.”43 Neither of these conditions is present in
this case. The Insurers for the Underlying Policies denied coverage in November 2012, and the
underlying Insurers have not paid or been held liable to pay the full amount of the underlying
limit of the Policy. Defendant Bartle has failed to show that there is any claim for excess
coverage under the Underlying Policies, and therefore they have no relevance to his claim for
coverage in this case.
Bartle has not met his burden to bring forth specific facts from which a rational trier of
fact could find that he is entitled to coverage as an “Insured” under the Policy. Accordingly, the
Court grants Plaintiffs’ Second Motion for Summary Judgment.
2.

Plaintiffs’ First Motion for Summary Judgment (Doc. 26)

Plaintiffs’ first motion for summary judgment asks the Court to find that, even if Bartle
establishes he is an “Insured” under the Policy, Plaintiffs have no duty to indemnify or defend
him given the requirements and exclusions for liability set forth in the Policy. In light of its
ruling on Plaintiffs’ Second Motion for Summary Judgment, the Court declines to rule on
Plaintiffs’ first motion. Therefore, Plaintiffs’ Motion for Summary Judgment is denied as moot.

43

Policy, Doc. 27-1, p. 5.

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B.

Defendant Bartle’s Motion for Summary Judgment (Doc. 67)
Bartle moves for summary judgment on two bases. First, he asserts that the Court does

not have subject matter jurisdiction because the Court does not have access to the Underlying
Policies referenced in the Policy. Bartle made this argument before the Underlying Policies were
produced in the course of the litigation, and it is now moot. Second, Bartle asserts that Plaintiffs
cannot show that they are entitled to judgment on their Complaint because the use of the term
“Insured” throughout the Policy is ambiguous and thus coverage must be construed in his favor.
The Court disagrees.
Under Kansas law, “[a] policy is ambiguous ‘when it contains language of doubtful or
conflicting meaning based on a reasonable construction of the policy’s language.’ ”44 “A term is
not ambiguous merely because the parties disagree about the interpretation of the language.”45
“ ‘Ambiguity in a written contract does not appear until the application of pertinent rules of
interpretation to the fact of the instrument leaves it genuinely uncertain which one of two or
more meanings is the proper meaning.’ ”46 When determining ambiguity, “the proper test is ‘not
what the insurer intends the language to mean, but what a reasonably prudent insured would
understand the language to mean.’ ”47
Bartle argues that the drafter’s use of the phrase “the Insured” throughout the Policy is
ambiguous because at certain points in the Policy, the term refers to the primary Insured, i.e.,

44

Payless Shoesource, Inc. v. Travelers Cos., Inc. 569 F. Supp. 2d 1189, 1195 (D. Kan. 2008) (quoting
Kemper Ins. Cos. v. Weber, 38 Kan. App. 2d 546, 551, 168 P.3d 607, 610 (2007)).
45

Id.

46

Id. (quoting Am. Family Mut. Ins. Co. v. Wilkins, 285 Kan. 1054, 1059, 179 P.3d 1104, 1109-10

47

Id.

(2008)).

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Garmin, over other Insureds.

For example, Defendant Bartle points the following Policy

provisions in the Schedule and Information pages that specifically refer to Garmin as the
“Insured”:
1200 East [sic] 151st Street Olathe, Kansas 66062, United States of America.
The Insured is: Corporation48
...
The Insured owns a corporate hangar located at New Century Airport in
Overland Park, Kansas, which is used mainly to hangar Garmin Owned aircraft.
This facility is occasionally used for temporary (overnight) storage of customers
aircraft who visit their facility. . . .49
Defendant Bartle then points to policy provisions in the Aircraft Builders Products Liability
Insurance Wording that refer to “several insureds,” “such “Insured,” and “more than one
Insured”:

Each of the several insureds covered by this Insurance shall have the same
protection as such Insured would have had this Insurance been issued
individually to each of them; provided, however, that the inclusion hereunder of
more than one Insured shall not operate to increase the total liability of the
Insurers beyond the limits stated in the Schedule.50
He then points to the choice of law provision within the Aircraft Builders Products Liability
Insurance Wording, arguing that the use of the term “Insured” in this provision shows the
drafter’s intent to give specific meaning of the term “Insured” to Garmin.
16. Applicable Law
This Insurance shall be governed by the laws of the State wherein the Insured
has its principal place of business (as set forth in the Schedule) and will be subject

48

Policy, Doc. 27-1, p. 2 (emphasis added).

49

Policy, Doc. 27-1, p. 10 (emphasis added).

50

Policy, Doc. 27-1, p. 21 (emphasis added).

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to the jurisdiction of competent jurisdiction as provided for in Condition 20
Service of Suit.51
According to Bartle, by utilizing the phrase “the Insured” in such a way throughout the Policy,
the drafters have created the reasonable impression that “the Insured” may refer specifically to
the primary insured of the Policy, Garmin, yet at the same time, the definition of the term
“Insured” includes other associated companies and ventures with Garmin, thus creating the
impression that the Policy also provides coverage for such associated companies and ventures.
The Court does not agree. When viewing the Policy as a whole, the drafter’s use of the
term “Insured” is not ambiguous. The Schedule and first page of the Policy identify the
“Insured” as Garmin International, Inc., Garmin subsidiaries, and affiliated or associated
companies. The Aircraft Builders Products Liability Wording then provides a definition of
Insured in “Definition (G),” which includes “the Insureds named in the Schedule” and other
business entities. “Definition (G)” was amended in the Additional Conditions to include “joint
ventures” and other associated entities with Garmin.

This definition does not expand the

definition of “Insured” found on the Schedule or anywhere other than Definition (G) to the
Aircraft Builders Product Liability Insurance Wording. The first two references cited above
appear only in the Schedule and Information pages and not in the Aircraft Builders Product
Liability Insurance Wording section of the Policy. Thus, the term “Insured” in those provisions
only refers to the “Insured” defined in the Schedule. The last two references cited above appear
in the Aircraft Builders Product Liability Insurance Wording, which allows the definition of
“Insured” to also include “joint ventures” and other entities associated with Garmin. The fact

51

Policy, Doc. 27-1, p. 24 (emphasis added).

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that the Policy provides a different scope of the definition for specific coverage does not create
ambiguity. Accordingly, the Court finds that the Policy is not ambiguous.
Even if the Court were to find the Policy ambiguous, the Court cannot grant summary
judgment on Plaintiffs’ claims. As the party seeking coverage under the Policy, Bartle has the
burden to prove that he is entitled to “Insured” status under the Policy.52 As explained above, to
be entitled to coverage, Bartle must show the existence of a joint venture or other business entity
described in the amended definition of “Insured” between him and Garmin. Bartle’s motion
provides no argument or evidence that he was involved in any type of business entity with
Garmin. Therefore, Defendant Bartle’s Motion for Summary Judgment is denied.
IT IS ACCORDINGLY ORDERED this 15th day of July, 2013, that Plaintiffs’ Motion
for Summary Judgment (Doc. 26) is hereby DENIED AS MOOT.
IT IS FURTHER ORDERED this 15th day of July 2013, that Defendant Henry P.
Bartle’s Motion for Summary Judgment (Doc. 67) is hereby DENIED.
IT IS FURTHER ORDERED this 15th day of July 2013, that Plaintiffs’ Second Motion
for Summary Judgment (Doc. 71) is hereby GRANTED.
IT IS SO ORDERED.

ERIC F. MELGREN
UNITED STATES DISTRICT JUDGE

52

See Kansas Farm Bureau Ins. Co., 16 Kan. App. 2d at 328, 823 P.2d at 218 (holding that an “Insured”
has the burden of proving he is entitled to coverage).

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